Credit card fees and charges - how to read and understand your statement
How to make sense of your credit card statement.
We’ve already taken a look at how to choose a good credit card deal, but what about if you already have a card? Research from Switcher.ie shows the majority of Irish consumers are confused by at least one household bill, with lots of us not even checking bills on a monthly basis.
When it comes to your credit card, understanding the various charges on your statement can really help you to make the most of your card, and ensure you’re not being hit with charges that are easily avoidable. Here are the key elements to look out for, and what they mean:
Credit card transaction types and dates
You’ll see transactions types like ‘Sale’, ‘Payment’ and ‘Charge’ on your statement. The sale ones are for when you’ve used your card to make a purchase, the payments are amounts you’ve paid off your card, and charges relate to interest or other charges from your bank.
Some of the charges include:
- Purchase interest: interest charged on purchases you make on your credit card.
- Cash Advance interest: interest charged on any withdrawals you make from the ATM using your credit card.
- Overlimit fee: a charge for going above your agreed credit limit.
- Exchange rate transaction fee: any time you make a payment or withdraw cash in another currency, you will be charged this exchange rate fee.
On your statement, you’ll also see a transaction date, which is the date that the purchase/transaction took place, and a posting date, which is the date that the purchase/transaction shows up on your bill. And, remember, in April you’ll be charged Stamp Duty of €30 on each credit card you have.
When you open your credit card bill, review each of the transactions to make sure you recognise them all - if there’s anything that looks suspicious, contact your bank to double-check it.
Credit card balances and payments
Once you have reviewed all your transactions, you should next check how much you owe and when you need to pay by. The important things to check are:
- The statement balance, which is the total amount owed on your card as at the date of the statement
- The payment due date, which is the monthly date by which you have to pay at least the minimum payment off your credit card.
- The minimum payment, which is is the lowest amount of money that you have to pay off your credit card each month.
While it may be tempting to only pay off the minimum amount, doing so will mean it’ll take you a long time to clear your card - and that’s assuming you don’t use the card to buy anything else.
Instead, you should pay off as much as you can afford each month to ensure the statement balance is reducing each month.
Worried about your credit card balance?
If you’re struggling to pay off your credit card balance, the first thing you should do is stop using your card altogether.
Next, take a look at card with 0% interest on balances transferred - such as the Chill Money Credit Card, which is one of the best offers on the market at the moment, with 0% interest for 9 months on balances transferred.
The Competition and Consumer Protection Commission has a great credit card comparison, and a calculator which shows how quickly you can clear your card - this could really help you to budget.
Remember, your bank will be happy to answer any questions you have on your credit card statement, so if you’re confused or worried about any element of it, be sure to contact them to discuss it.